Posts Tagged ‘UIGEA’

APCW Perspectives Weekly for June 10th, 2011

This week’s online gambling news comes from New York City, where a “Black Friday” defendant has been denied bail. Plus, is legal Internet betting in Washington DC in jeopardy? Also, updates from Merge Poker, Intertops, and QuickTender.

If we believe that 50 years from now, poker and online poker will be part of our world, then what went down in December 2010 will be little more than a footnote in an effort that took maybe 5, maybe 10 years to get to the beginning stages of however the 2060 WSOP is run.

In fact, makes me wanna give an assignment to Las Vegas 1st graders and/or 2+2 — crayon drawings of how they see the 2060 WSOP.

Anyhow, though I still think we (as in “poker”) technically may have one out left, all interested parties seem to be resigned to the notion that 2010 — for all the heartfelt ups and downs we experienced — is not the year for change poker players can believe in. Right now I think our best bet, with all the major-world issues being fought over in DC, would be for a staffer to trip while bringing a bill to Obama and letting a few sheets of paper slip in unnoticed for an accidental signing.

We’ll have to leave it to the mainstream pundits to determine why on earth this shoulda even been a problem when we ultimately brought $60 billion via decent policy to the table — and the people theoretically supporting it controlled all branches of government … one of them being one of the most powerful people in Washington DC. Something doesn’t seem to add up, and I suspect Harry Reid will have a lot of questions to answer but not really as a guy who secured his gig for 6 years. But in the meantime, the PPA, in just its fourth year of existence, has put out the statement below surrendering this round while assessing how to build off a year where they made more progress for poker than ever before seen on a federal level … bringing us closer to those kindergarten dreams of what 2060 could look like:

For a good portion of last week, it seemed likely that the #reidbill was going to be attached to the tax cut bill making it’s way through Congress. On Friday morning, Politico reported that the tax cut bill had no such pokery verbage, but that attachment to that piece of legislation was “still possible” if Reid made “additional modifications” before the tax bill is voted on sometime in the coming days.

A CR is needed because Congress failed to pass any of the 12 regular appropriations bills for 2011, in addition to failing to pass a budget resolution at all for the first time since 1974.

Democrats plan to amend the CR in the Senate into an omnibus appropriations bill that has been crafted by Senate Appropriations Committee Chairman Daniel Inouye (D-Hawaii).

That Senate bill, which is also being worked on by minority staff in an effort to garner enough Republican votes to overcome a filibuster, would provide about $19 billion more in funding than the House CR and would contain congressional earmarks.

The Washington Post featured the internet poker legislation on the front-page of their website on Saturday, and had this to say about the possibility that #reidbill might be included, in the omnibus -or- in other legislation:

Reid initially toyed with adding the proposal to the tax-cut compromise between Republicans and President Obama but decided against it amid concerns that it would further complicate that bill’s chances for getting passed, according to lobbyists and aides. The measure could be added to an omnibus spending bill or other must-pass legislation in coming days.

For all the talk about taxes lately, the Senateâ€™s only must-do issue in the lame-duck session is extending government funding into next year, a fight that appears set to take place late next week. Senators are up against a clear deadline: the latest continuing resolution to keep the government running ends at 12:01am on Sunday Dec. 19th.

-and-

The Senate is set to have its first procedural vote on the tax bill next Monday, so it is likely that the chamber will not take up the omnibus until Wednesday at the earliest. That would mean that both the Senate and the House would have to pass it by the end of Saturday if lawmakers are to avert a government shutdown.

The urgency of this continued resolution to the operation of our government is clear.Â Whether the fate of internet poker legislation rests with the same piece of legislation is yet to be seen.

This should be a big week, whether its days of explosion or fizzle. Some might contend poker has already changed just having gotten to where we are today — with US Senators actively engaged in decisions immediately affecting the way people play online poker in this country.

Though a bit more cynical than Howard Lederer’s take on the political game, Barry Greenstein offers his interesting take on how Washington DC works here … bits from an episode of Live at the Bike recorded on November 29, 2006 — shortly after George Bush signed the UIGEA into law:

Gotta wonder how Greenstein’s perspective may have changed in the past four years, as he has been at least peripherally involved in poker policy ever since he made a declaration in 2007 that we were six months away from legally mainstreamed online poker.

I’m surprised to see poker people still speculating on the #ReidBill’s chances for bringing the poker industry a Christmas present or leaving us a lump of coal … as if any of us could be more than donkeys in a game where that word alone means something totally different.

(OK, you’re right, I can’t prove that … but if I had a receipt it would be an easier tax deduction for us than you! And true fact: I did ride paddle boats outside the Jefferson Memorial more times during the Carter administration than I saw Star Wars at a drive-in, so …)

Though just semi-experienced at best, I have been down this special-interest road before … where you’ve got a bill on the table but are running up against a semi-arbitrary not-clearly defined session clock — go Texas poker ’09! Which is why Pokerati is setting its line for #Reidbill passage firmly at somewhere between 8 and 88 percent.

Book it. We should know for sure by Tuesday or Monday or Wednesday-ish.

Though no one in the so-called “poker industry” has much if any political experience prior to Harry Reid’s current term … some poker-biz donkey-pols have learned a thing or two along the way to get us here. For a little perspective, here’s “the Professor” Howard Lederer learnin’ us some Political Science 101 last year at a high-society charity tourney in Washington DC, providing an overview of the game at hand … particularly for small-time players hoping to satellite into a bigger Beltway event:

If this was the message that got out around the Beltway and beyond, you’d think we coulda had the UIGEA Redux done years ago … and would already be gearing up for the relaunch of an American-friendly Sunday Millions in the coming new year. Of course that woulda required legislation that woulda had some 14 interested parties agreeing, “yeah, I can live with that”.

Check it out … read the whole story, but yesterday’s hedline in Slate magazine pretty much says it all, no?

From the office of my favorite most powerful* Nevada senator re-elected in 2010 … you know, the guy I voted for, not because we had any sorta official quid pro quo but more as a show of “good faith” from yours truly and Pokerati.com … ending lame duck speculation and negotiation?

* UPDATE: And handsome

Washington, DC â€“ Nevada Senator Harry Reid [yesterday] made the following statement on the online poker bill he is working to pass.

â€œThe online poker bill I am working on is good for the country and for Nevada. Under the status quo, Internet poker is played by millions of Americans every day in an essentially unregulated environment, meaning no protections for minors, no respect for State law, no assurance that games are fair and honest, and no one to turn to if youâ€™re defrauded. Additionally, neither federal nor State governments collect a dime of revenue from this multibillion dollar Internet poker industry.

â€œThe legislation I am working on would get our collective heads out of the sand and create a strict regulatory environment to protect U.S. consumers, prevent underage gambling, and respect the decisions of States that donâ€™t allow gambling. Experienced regulators already trusted by millions of Americans will maintain oversight and reputable operators with proven track records will provide a secure gaming environment for Americans. Finally, the revenue and jobs from this multibillion dollar industry will stay where it belongs â€“ here in America.

â€œI still have serious concerns about legalizing the broad range of casino-type gambling through the Internet. The bill I am working on would make all other types of Internet gambling clearly illegal, while increasing penalties and strengthening the ability of law enforcement to shut down illegal sites.â€

BJ’s Early Analysis — he puts up a post twice a quarter but gets linked up by writers for the New York Times.

Everyone seems to be on pins and needles waiting to hear something … when along comes word over the transom from our good-good friends at the PPA, giving the update on where things stand in the halls of a lame-duck Congress as per online poker.

In a nutshell: We’ve been working toward this for five years. Don’t let Harrah’s take all the credit. Hang tight. We’re Blackberrying our asses off trying to get this thing right. Stay tuned, quit yer bitchin’, things change. And, of course, don’t forget to spend whatever political capital you may have telling your Congresspeeps why online poker regulation is the most awesomest thing since America and freedom!

Meanwhile, I set up a specific Pokerati tag for “UIGEA Repeal” so you could follow the most timely best from all Pokerati’s well-informed contributors as they posted … but alas, have since discovered a rather key error in that, technically, this unofficial Harry Reid Poker Bill wouldn’t repeal the UIGEA, but rather would strengthen it … still hopefully to the poker world’s liking, obv.

UPDATE: Indeed, Al D’Amato and the PPA are calling on YOU to contact your US senators. Assuming you believe in the overall cause of guaranteeing American freedom and much needed tax revenue via proper regulation of online poker, as espoused by D’Amato in the email blast titled “Tell your Senators to Support iPoker Regulation TODAY!” … click here to give online-poker proponents some numbers to bargain with when negotiating with other special interests.

Stu Hoegner, our resident international gaming attorney here at Pokerati – a.k.a. @GamingCounsel as he is well-followed on Twitter – has located a copy of a document that has been widely requested by our readers in the past 24 hours.

This post is based on one version of the Reid bill that is circulating. There may be others.

The top-line provisions of the Prohibition of Internet Gambling, Internet Poker Regulation and UIGEA Enforcement Act (the “Bill”) are as follows. This is not an exhaustive analysis – it’s too soon for that and the participation of many others in that kind of exercise is required (and salutary).

1. Findings

The Bill acknowledges that Internet gambling has continued to flourish since adoption of the Unlawful Internet Gambling Enforcement Act (UIGEA) and that the UIGEA has been unable to stop operators from offering sports wagering and other forms of gambling. The Bill goes on to affirm the longstanding federal policy against interstate gaming on professional, scholastic, or amateur sporting events.

In the Bill, Congress finds that poker enjoys a long history and cultural tradition in the US. The Bill states that in the long run the outcome of poker is influenced by the skill of the participants and it distinguishes house-banked games (where wagers are made against a casino) from poker (where wagers are made between and among the participants).

The Findings section of the Bill clearly sets the stage for the licensing of Internet poker only, and the Bill goes on to do just that.

Congress also finds that a new federal Internet poker market “should be regulated by entities that have an established track record of providing a well regulated gaming market to American consumers” and “should be limited to service should be limited, at least initially, to service providers that have an established track record of complying with a strict regulatory environment, have an established track record of providing fair games to consumers, and have significant goodwill and assets at stake, in addition to their Internet poker assets, to ensure they will comply strictly with the new regulatory regime.”

Notwithstanding that the World Trade Organization decisions in the US-Antigua and Barbuda dispute are “erroneous,” the Bill asserts that the US should “conclude” the dispute in an orderly and expeditious fashion that respects World Trade Organization rules and the federal and State prerogative to restrict and control wagering on sporting events and games of chance.

2. Definitions

Some of the more important definitions in the Bill are set out below.

“Bet or wager” as used in the Bill has the same definition as under 31 U.S.C. §5362(1) (i.e., UIGEA) but excludes bets or wagers under the Interstate Horseracing Act of 1978, bets or wagers that are intratribal transactions, and bets or wagers that are a chance to win a lottery or other game authorized by a state or a tribe that is an intrastate transaction as described under UIGEA.

We have a definition of poker in the Bill. “Poker” means any of several card games in which success over the long run is influenced by the skill of the player and

(A) that is commonly referred to as poker;

(B) that is played by 2 or more people who bet or wager against each other on cards dealt to them out of a common deck of cards

i. including games using community cards that any player may use to make his or her hand, and

ii. including games using electronic devices that simulate a deck of cards;

(C) in which players compete against each other and not against the person operating the game;

(D) in which bets or wagers of one player are often designed to affect the decision of another player in the game; and

(E) in which the person operating the game may assess a commission fee or any other type of fee.

Poker also includes poker tournaments in which players pay a fee to play against each other, including tournaments where the licensee guarantees a minimum tournament pot.

As a threshold matter, poker must be a card game where success over the long run is influenced by skill. This is an interesting definition that will generate a lot of discussion. How long is the long run and how many hands does it contain? How much skill need be involved if the skill of the player must merely “influence” success? Provided any particular iteration of poker that’s out there (and there are many) meet these various tests, it should qualify.

An “Internet poker facility” means an “Internet gaming facility” (also defined) that provides bets or wagers only with respect to a game, hand, tournament, or other contest of poker. Only persons operating Internet poker facilities under a license issued by a Qualified Body (see below) may be licensees under the Bill.

A “Qualified Body” means a State or tribal regulatory body that has been qualified by the Secretary of Commerce as provided in of section 8202(c) of the Bill (including entities qualified as a matter of law under subsection (c)(1)). This part of the Bill automatically qualifies state and tribal agencies as bodies qualified to grant licences that, among other things: currently regulate casino gaming and have done so for 5 years preceding the date of enactment of the Bill; have regulated casino gaming facilities involving gross gaming revenue of at least 5% of the total US casino gaming revenue for at least 3 out of the last 5 years preceding enactment of the Bill; are in states or on Indian lands that are opted in under section 8204 of the Bill (see below). Those not automatically qualified under section 8202(c)(1) can apply to the Secretary of Commerce for designation as a Qualified Body.

Finally, a “Significant Vendor” means an individual or entity that, with respect to a licensee or applicant under the Bill:

(A) knowingly manages, administers, or controls bets or wagers that are initiated, received, or otherwise made within the United States;

(B) knowingly manages, administers, or controls the games with which such bets or wagers are associated;

(C) develops, maintains, operates, the software, other system programs or hardware on which the games or the bets or wagers are managed, administered or controlled;

(D) provides the trademarks, trade names, service marks, or similar intellectual property under which the licensee identifies its Internet Poker Facility to its customers in the United States;

(E) provides any products, services, or assets and is paid a percentage of gaming revenue by the licensee in order to do so; or,

(F) with respect to an applicant, proposes to provide any of the activities, services or items identified in (A)-(E), above.

Fortunately, the global gaming consultants at Gambling Compliance have not only had eyes on this constantly-changing document, they also have had ears on Capitol Hill itself.Â The analysis of the Reid Online Gambling Bill by folks in-the-know is available on their website for paying subscribers.Â Although a portion of the document summarizes stuff we learned from the Wall Street Journal article posted late yesterday, there is is a huge amount of new (and compelling) info from what we had available last night.Â Probably the biggest surprise is a strengthening of the UIGEA mentioned the text of the leaked Reid bill, and not the complete repeal per early reports.

Top Ten Facts From Inside The Draft ->

1.Â The “entities controlled by” casinos, race tracks, and slot makers would be “immediately eligible” to get licenses for online poker.Â How soon is not clear.

2. The bill prohibits new US licensees initially from “pooling any player liquidity from any international poker networks.”Â I’m not exactly sure what this means, but my take is that US licensees would not be able to pull in bankrolls from Full Tilt, Poker Stars, UB, or any foreign poker gambling site for some period of time.

3. US Department of Commerce would oversee regulation, but “the most well established” state and tribal authorties would gain power over “licensing, investigatory, and enforcement” issues.

4. US online poker operators would need to pay a ostentatious rake licensing fee on monthly customer deposits, “possibly as high as 20 percent.” Revenue to be split between feds, state that the poker player lives in, and the state the company operates from.

5. Spoiler! Bill wants “beef up enforcement” of UIGEA by requiring Financial Crimes Enforcement Network to submit a blacklist of â€œunlicensed Internet gaming enterprisesâ€ to the US Secretary of the Treasury.Â Wasn’t this supposed to be an anti-UIGEA bill?

6. All current sites accepting bets from US resident better stop doing it upon bill passage if they ever “wished to participate in a legal US market.”

7.Â In the draft version Gambling Compliance saw, the first US online poker operators could not get their licenses for at least 15 months.Â After the 15 month period, there would be a 2 yr period where the US Department of Commerce could decide if they even wanted to open up the market to include those beyond established US gaming entities.

8. Collegiate scholarly types think there is some *serious* preferential treatment in this draft given to the largest state agencies such as Nevada and New Jersey, giving them automatic qualification and a jump on prospectives.

9. Tribals are pretty unhappy with the language of the draft, touting an analysis around around DC which states the bill is â€œrigged to ensure that Nevada immediately becomes the licensing hub, and that tribal gaming authorities will never be able to qualify.â€

10. Clarification is given that both online betting for horse races, and intrastate internet sales of lottery tickets do not violate the 1961 Wire Act.

Keep in mind this bill is a rapidly “moving target”, peeps.Â The lame duck session is set to continue at least through the end of next week; final draft of the Reid bill seems unlikely until the end of Congressional session.

In the words of John Pappas, Executive Director of the PPA, â€œAnyone who says he knows what the bill will be doesnâ€™t know anything.â€

The opposition is rallying the troops to squash any dreams of a poker-industry Christmas present. Check out the letter below, sent to Reid and Republican Majority Leader Mitch McConnell (R-KY) by Reps. Spencer Bachus (R-AL), Dave Camp (R-MI), and Lamar Smith (R-TX), the ranking members in the powerful Financial Services, Ways & Means, and Judicial Committees, respectively.

The CC list includes influential Republican online gambling haters Kyl, Boehner, Cantor, and Pence — so you can see how it’s essentially a call to arms to the Republican party to sink this ship before it leaves port … or should we say port security?

Expect gloves to come off in congressional backrooms and in-boxes. The letter points out bipartisan opposition to HR 2267, even though it sailed through its 2010 committee vote with more bipartisan support. What it doesn’t point out — beyond the general issues of more tax revenue while protecting American liberty and supporting the will of the people — is how:

regulated online poker will create American jobs — 10s of thousands of them

Ron Paul has repeatedly supported efforts to repeal the UIGEA, a note to Tea Party voters who really wanna believe in sensible government, so they know this isn’t your usual government expansion

“Poker-only” is probably a safe compromise — that legal American businesses support and stands to have the most immediate positive impact with least possible likelihood of damage (since so many millions of Americans already play)

“… we write to inform you that we will not agree to invoke closure on the motion to proceed to any legislative item until the Senate has acted to fund the government and we have prevented the tax increase that is currently awaiting all American taxpayers. With little time left in this Congressional session, legislative scheduling should be focused on these critical priorities. While there are other items that might ultimately be worthy of the Senate’s attention, we cannot agree to prioritize any matters above the critical issues of funding the government and preventing a job-killing tax hike.”

According to an article on the filibuster published in The Hill, “McConnell and other congressional leaders met with President Obama at the White House Tuesday to try to reach a deal on the tax cuts.” In Reid’s video, he states that Kyl has been chosen by the Republican party to represent them in these negotitations.Â Reid has selected Max Baucus (D-MT), chairman of the Senate Finance Committee, to represent the Dems.

A number of measures, in addition to COICA and the completely dead HR 2267, that have been hoping for motion during the last session of the 111th Congress, are the DREAM Act (immigration reform bill), extensions on the nation’s unemployment benefits, a repeal of “Don’t ask, Don’t tell”, and the long-stalled nuclear arms START treaty.

Sign of things to come? A notice greeting visitors to seized file-sharing search engine torrent-finder.com. Federal graphic artists have been hard at work designing this new splash page for websites the DOJ intends to shut down.

While affected domains so far all fall under the purview of copyright infringement, one has to wonder what this could mean for any other sites on the DOJ’s list of domains-non-grata.

ICE first became actively involved in matters of online gaming with the government’s case against Daniel Tzvetkoff, a payment processor for Full Tilt and PokerStars who was the first person publicly indicted for UIGEA violations.

I’m sure this has absolutely nothing to do with anything, obv … but was going through some old pics and came across this screen-grab from July 2006 (some two months before the UIGEA)… when I hadn’t yet discovered the purpose of labeling images more descriptively than just wsop28.jpg, and the Feds apparently hadn’t yet figured out how to hide an IP address when emailing a link to a small-time poker blogger’s suggestive tag.

At the time, Phil Hellmuth had just won his 10th bracelet, no one thought twice about playing on Ultimate Bet, everyone in poker still had money, and Jamie Gold (of all people) seemed to represent the very worst poker had to offer. Ahh, the good ole days … even Russ Hamilton was presumed innocent then.

Though I hardly recall why specifically, something about this visitor seemed peculiar enough for me to wanna preserve the moment. With the benefit of hindsight, I’m sure I was just kidding.

Maybe I’m expecting too much from Annie … just watched her on MSNBC’s noon-time news, and I think if I were her opponent in this mini-debate I coulda blown her outta the water — even without believing anything I was saying! Fortunately, the opposition she’s up against here is so weak, she still clearly wins. The best psychology professor Tim Kelly’s got is some report about gambling addiction from 1999. As if anything related to the internet has any perception of validity when it comes from an era that existed before Windows XP … let alone the iPhone, the iPod, the War on Terror, and George W. Bush’s first term.

What I find most fascinating here is the sponsor for this news segment … GFT Forex online currency trading. Risk based on limited, imperfect information … clearly elements of skill with some players guaranteed to win and others guaranteed to lose … exchanging money over international boundaries … come play for free with a practice account? They just don’t have to make you go to a dot-net for that.

Seriously, check out this old ad and ask yourself … how is this high-variance online financial game any different than something you might see on Full Tilt? I think they’ve even got some of the same avatars!